8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) May 15, 2006

Spatializer Audio Laboratories, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-26460	95-4484725
(Commission File Number)	(IRS Employer Identification No.)
2025 Gateway Place, Suite 365, San Jose, California 95110
(Address of Principal Executive Offices)	(Zip Code)

408-453-4180

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02. Results of Operation and Financial Condition.

On May 15, 2006 the Registrant issued a press release announcing its operating results for the quarter ended March 31, 2006. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

The following exhibit is furnished as part of this Current Report on Form 8-K:

Exhibit No.	Description
99.1	Press Release

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Spatializer Audio Laboratories, Inc.
By:	/s/ Henry R. Mandell
	Henry R. Mandell, Chairman

Date: May 15, 2006

Exhibit Index

Exhibit No.	Description
99.1	Press Release

EX-99.1

EXHIBIT 99.1

CONTACT: INVESTOR RELATIONS

Henry R. Mandell, Chairman
Spatializer Audio Laboratories, Inc.

investor@spatializer.com

SPATIALIZER AUDIO LABORATORIES, INC. REPORTS
FIRST QUARTER OPERATING RESULTS

     San Jose, Calif., May 15, 2006- Spatializer Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced financial results for the first quarter ended March 31, 2006.

     Revenues for the three months ended March 31, 2006 were $100,000, compared to revenues of $332,000 in the comparable period last year, a decrease of 70%.

     Net loss in the three months ended March 31, 2006 was ($173,000), ($0.00) basic per share, compared with net income of $10,000, $0.00 basic and diluted per share, in the comparable period last year.

     Revenues in the three months ended March 31, 2006 were lower due to end-of-life on license programs and no recognition of deferred revenue, which had been recognized in the comparable period last year. The net loss resulted from decreased revenues, partially offset by lower operating expenses.

     At March 31, 2006, the Company had $352,000 in cash and cash equivalents as compared to $551,000 at December 31, 2005. The decrease in cash resulted from the net loss, a decrease in accounts payable and a decrease in notes payable, partially offset by a decrease in accounts receivable. The Company had working capital of $397,000 at March 31, 2006 as compared with working capital of $560,000 at December 31, 2005.

     About Spatializer

     Spatializer Audio Laboratories Inc. is developer, licensor and marketer of next-generation audio technologies for the consumer electronics, computing and mobile communication markets. The company’s advanced audio technology is incorporated into consumer electronics audio and video products, PC and mobile phone handsets from several global brand leaders. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in San Jose, CA, and representative offices throughout the Asia Pacific region. Further information may be obtained from the company’s web site, www.spatializer.com, Spatializer’s SEC filings, and by contacting the company’s Investor Relations Department at investor@spatializer.com.

Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of 1995: Certain information in this press release are forward looking statements that are based on management’s belief, as well as assumptions made by, and information currently available to management. While the company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the company’s financial goals will be realized. Numerous uncertainties and risk factors may affect the company’s actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the company. These uncertainties and risk factors include, but are not limited to the continued need for additional capital, loss of key personnel, dependence on new technology and intellectual property, dependence on the PC and consumer electronics industries, dependence on product shipments of third-party licensees, dependence on third-party technology integrators or chip suppliers, competition and pricing pressures, and other risks detailed from time to time in the company’s periodic reports filed with the Securities and Exchange Commission.

NOTE: Desper Products Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories Inc. Spatializer^® is a registered trademark of Desper Products Inc. All other trademarks are the property of their respective owners.

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

	March 31,			December 31,
	2006			2005
	(unaudited)
Current Assets:
Cash and Cash Equivalents	$	352,337		$	550,633
Accounts Receivable, net		95,365			155,233
Prepaid Expenses and Deposits		16,210			34,104
Total Current Assets		463,912			739,970
Fixed Assets
Accumulated Depreciation
Property and Equipment, net		14,337			18,403
Intangible Assets, net		132,972			138,548
Total Assets	$	611,221		$	896,921
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Note Payable		—			10,443
Accounts Payable		8,966			14,195
Accrued Wages and Benefits		15,140			48,095
Accrued Professional Fees		—			34,000
Accrued Commissions		42,105			31,917
Accrued Expenses		1,000			40,869
Total Current Liabilties		67,211			179,519
Shareholders’ Equity:
Common shares, $.01 par value, 65,000,000 shares authorized, 48,763,383 shares issued and outstanding at March 31,2006 and December 31, 2005		469,772			469,772
Additional Paid-In Capital		46,430,030			46,430,030
Accumulated Deficit		(46,355,792	)		(46,182,400	)
Total Shareholders’ Equity		544,010			717,402
	$	611,221		$	896,921

See notes to consolidated financial statements

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	For the Three Month Period Ended
	March 31,			March 31,
	2006			2005
Revenues:
Royalty Revenues	$	100,488		$	331,950
Cost of Revenues		10,189			33,872
Gross Profit		90,299			298,078
Operating Expenses:
General and Administrative		118,367			151,201
Research and Development		144,901			99,290
Sales and Marketing		1,241			39,253
		264,509			289,744
Operating (Loss)		(174,210	)		8,334
Interest and Other Income		3,219			2,920
Interest and Other Expense		—			(1,240	)
		3,219			1,680
Income (Loss) Before Income Tax		(170,991	)		10,014
Income Taxes		2,400			—
Net Income (Loss)	$	(173,391	)	$	10,014
Basic and Diluted Earnings Per S	$	(0.00	)	$	0.00
Weighted Average Shares Outstanding		48,763,383			46,975,365

See notes to consolidated financial statements

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